Boomerang costs

A new poll finds more than half of boomer parents are spending $100-$300 a month subsidizing their adult children.

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by MoneySense staff
May 7th, 2013

Online only.

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  • The majority of baby boomer parents have financially supported their adult children in some capacity, a new TD poll has found. Forty-three per cent let them live at home rent free, 29% subsidized big purchases like a new car or computer, 23% contributed to monthly bills like groceries and rent, 20% helped pay off their credit card or other debt and 18% parents have helped their children with the down payment on their first home. “Today’s high youth unemployment, increasing post-secondary education costs and high property prices means many young people are more likely to rely financially on their parents well into adulthood,” said TD’s John Tracy in a press release Tuesday. “As a parent, it’s natural to want to help when children struggle with finances, but it’s important this support does not compromise your own financial stability and retirement savings goals.” Tracy suggests boomers pay themselves first using automatic transfers into an RSP or TFSA, then use their disposable income to help their kids within reason.

One comment on “Boomerang costs

  1. The context and nature of financial support for adult children is more important than the money itself (^_^) I was lucky to have lived with my parents rent free for almost a year before moving out on my own. I helped them out with choirs around the house, and they taught me the importance of saving and financial planning. The arrangement worked really well. Before long I had saved up a down payment, bought my own place, moved out, and started living independently. By offering me a safe place to stay while I built up some savings, my folks have given me a much appreciated head start in life :) There are many good reasons why parents subsidize their children's expenses, but the important thing is for the beneficiaries to understand the sacrifices their parents are going through. Temporary financial support from mom and dad can be necessary if someone is in between jobs, or saving up for a major investment. However long term economic outpatient care usually does not benefit the parents nor the children. When boomers retire their quality of life will be largely affected by how their children will run the world. If a little extra financial encouragement today can get the younger generation to become more motivated then why not. I wouldn't be where I am today without my parent's support so I will certainly give back some day. On the other hand, receiving free money without understanding the importance of self sustainability, and personal accountability wouldn't help anyone in the long run. It's more about the principle and circumstances behind the giving, than the actually $100 to $300 a month :D

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